UK workers still feel in the grip of the economic downturn, especially in the public sector, according to the CIPD's latest quarterly Employee Outlook survey.

Worsening standards of living, falling job satisfaction, and high levels of job insecurity suggest that any continued move out of recession, has yet to filter through to the workplace.

The CIPD’s survey of 2,000 employees found that employees are three times (29%) more likely to report that their standard of living has worsened over the last three months than to say it has improved (10%), compared to 28% and 13% for the same findings last quarter.

The CIPD’s job satisfaction index has fallen to a record low of +35*, compared to +36 last quarter and from a high of +46 in Summer 2009. Nearly a fifth of employees (18%) think it likely they could lose their jobs and two-thirds (66%) think it would be difficult to find a new job if they were made redundant.

Almost half of employees say that their organisation has either frozen (40%) or cut (7%) pay in response to the downturn, and a similar proportion of staff say their organisation has either already made redundancies (31%) or is planning to do so (16%).

The Employee Outlook survey also shows a particular deterioration among public sector employees’ attitudes towards their jobs and management, as the impact of government spending cuts on jobs, pay and benefits becomes clearer.

Among public sector staff, job satisfaction has fallen by 3% over the last quarter to +31 (compared to +33 in the private sector and +53 in the voluntary sector). More than a quarter (26%) think it likely they could lose their jobs (compared to 17% in the private sector).

Almost half (40%) say their employer is planning to make redundancies (compared to 10% in the private sector) and the majority report their organisation has either frozen (51%) or cut pay (7%) (compared to 38% and 7% in the private sector).

Just 16% say they trust their senior leaders (compared to 39% in the private sector) and less than one in five (18%) feel properly consulted on important decisions (compared to 24% in the private sector).

Ben Willmott, senior public policy adviser, CIPD, says: “The reality for many in the workplace is that they still feel like they are in the grip of a severe economic downturn.

“Against this background it is worrying to see that public sector employees have increasingly negative attitudes to their senior managers, with less than a fifth saying they trust senior managers or are consulted by them on important decisions.

“One of the difficulties facing senior public sector managers in the current environment, in which major spending cuts have been announced but few details have been released, is that they too may also be in the dark and may not yet know how many jobs will have to go. However it is important that, if this is the case, they communicate the situation to staff and continue to have an open dialogue with employees as more information comes through. People are more likely to accept tough decisions if they are kept informed and given the right information at the right time.

“The government also has a key role to help rebuild trust in public sector leadership by allowing adequate consultation with employees over proposed changes to public service delivery so staff feel that their views have been taken into account before decisions are made.”